*CPT Selected Articles

Court Trial Updates

Lift Users' Infringement Established in First-instance Ruling

in China's First Case of IC Lift Patent Infringement

In July 2004, the Shenzhen City Wanglong Intelligence Science and Technology Co., Ltd. (Wanglong) brought an action in the Shenzhen Intermediate People's Court on the ground that the Shenzhen City Kesong Electronics Co., Ltd. (Kesong), Shenzhen City Huiqin Property Management Co., Ltd. (Huiqin) and the Merchants Bank had infringed its patent right for the "IC lift management system and method", requesting Kesong to pay RMB 500,000 yuan in compensation for its economic losses, and Huiqin and the Merchants Bank to immediately cease their infringing acts.

Kesong argued that the said patent did not possess novelty and inventiveness and Kesong had the right of prior use; Huiqin and the Merchants Bank believed that they had purchased the product at issue from a legitimate source, and they were merely the managing party and user of the product, so they did not infringe the patent right.

Upon hearing the case, the Shenzhen Intermediate People's Court held that the plaintiff (Wanglong)'s patent right for the "IC lift management system and method" was valid. The defendant, Kesong, manufactured and marketed the LCU300 lift controller in the lift control system. This product comprised the IC lift management module for which the plaintiff had the patent. The defendant, Merchants Bank, used, without the plaintiff's license, the IC lift control system infringing the plaintiff's patent right for production and business purposes, and the use was an infringing act. The defendant, Huiqin, was entrusted by the Merchants Bank with maintaining and managing the lift, and was not the owner of the infringing lift control system, so did not commit infringement. Therefore, the Shenzhen Intermediate People's Court rendered, in May 2005, the ruling of first instance that Kesong immediately cease its act of manufacturing and marketing the intelligent lift controllers, and pay Wanglong RMB 300,000 yuan for the damages; and the Merchants Bank immediately cease its use of the infringing IC lift control system.(5141x)

Baidu Involved in a Case of Infringement of Right of

Communication Through Information Network

The Shanghai Busheng Music and Culture Communication Co., Ltd. (Busheng) brought an action in the Beijing Haidian District People's Court on the ground that the Beijing Baidu Network Communication Technology Co., Ltd. (Baidu) had infringed its right of communication of works through information network. The plaintiff argued that the defendant provided the public, on its website, with the service of downloading the MP3 file of songs recorded and produced by the plaintiff without its license, seriously infringed its right, and caused great losses to it. The defendant argued in defense that the defendant was a neutral searching engine service provider providing the network users with searching results according to the technical rules, rather than providing the service for them to download the songs involved. The way Baidu made profits had nothing to do with whether the songs were linked. The defendant was neither obliged, nor able, to provide the specific information of the address of each file. Its act was faultless.

Upon hearing the case, the Court held that the provision of searching engine service was limited to searching and sorting out information and providing the Internet users with search and inquiry service, and the information searched should not be used to make profits. Act of linking, in the service provided by the defendant, which only involved the titles of songs or names of singers, rather than content, and the content of the relevant web page which was catalogue or classification should not be deemed to be an act of infringement. Where the defendant directly used, to make profits, the MP3 files in connection with the songs at issue, without making clear the legitimate origin of the related MP3 files and without license from the plaintiff, the act inhibited the plaintiff from communicating its sound recording products on the Internet, so constituted an infringement. Therefore, the Court made, on 16 September 2005, the Ruling No. Haiminzhuzi 14665/2005 that the defendant cease providing the service for downloading the MP3 files with the songs involved, and pay RMB 68,000 yuan for the damages. (5141xu)

Copyright Infringement Dispute Involving Books of the Twenty-four Histories and

the Qing Dynasty History Manuscript

The Twenty-four Histories (the dynastic histories from remote antiquity till the Ming Dynasty) and the Qing Dynasty History Manuscript are works re-edited by the China Books Publishing House under the auspices of the Central Government. After their editions with varied layout were published by the China Books Publishing House, the China Books Publishing House revised and reprinted them.

The Tianjin Suoyi Data Technology Co., Ltd. (Suoyi) uploaded part of the Twenty-four Histories and the Qing Dynasty History Manuscript onto its website, and worked out a system for searching and browsing the whole texts of the two works combined Twenty-five Histories (the Twenty-five Histories system) and its website version, which were published by the Tianjin Electronics Publishing House.

The China Books Publishing House held that the Suoyi and the Tianjin Electronics Publishing House had infringed its copyright in the re-edited Twenty-four Histories and the Qing Dynasty History Manuscript, so brought an action in the Beijing No.1 Intermediate People's Court, which made the ruling to order the Suoyi and Tianjin Electronics Publishing House immediately cease their infringing act and jointly pay the China Books Publishing House RMB 1.25 million yuan in compensation of its economic losses. Besides, it ordered the Suoyi to pay the China Books Publishing House RMB 30,000 yuan in compensation of its economic losses caused because of the infringement of its right of communication through information network.

Dissatisfied with the ruling, Suoyi appealed to the Beijing Higher People's Court, which believed that the Twenty-four Histories and the Qing Dynasty History Manuscript for which the China Books Publishing House had made its claims were the result of its work of re-editing with creative labour from its employees, so they constituted works in the sense of the Copyright Law. Besides, the court directly applied the provisions of the current Copyright Law on works of corporate persons. Also believing that the first-instance court had ascertained the basic facts and was not undue in its application of law, the Beijing Higher People's Court made, on 9 August 2005, the final Ruling No. Gaomingzhongzi 442/2005 to have rejected the appeal and upheld the first-instance ruling. (5141x)

Avon's Application for Registration of Trademark

"Moisture Therapy & Device" Rejected in the Final Ruling

On 7 December 2005, the US Avon Products Corporation (Avon) filed an application for registration of the trademark "Moisture Therapy & device" to be used on goods of class 3 in the International Classification, such as cosmetic preparation for skin-care products, shower gel, cosmetic preparation for detergent, and cosmetic products. The two English words in the trademark were arranged one above another with a horizontal line underneath. The Trademark Office rejected the application on the ground that the Chinese translation of the trademark had direct reference to the function and intended purpose of the goods. After its reexamination application was rejected by the Trademark Review and Adjudication Board (TRAB), Avon brought an action in the Beijing No. 1 Intermediate People's Court, which made Ruling No. Yixingchuzi 608/2004 to have upheld the reexamination decision made by the TRAB.

Dissatisfied, the Avon appealed to in the Beijing Higher People's Court, which, upon hearing the case, held that the two words "Moisture and Therapy" used together indeed made the trademark in question directly refer "only" to the quality, main raw material, function and intended purpose ... of the goods. The TRAB's decision that the trademark in question is "difficult to play the role of distinguishing the origin of goods" conformed to the consumers' objective cognition, complied with the provision of Article 11, paragraph two of the Trademark Law; Avon should present the claim on its own initiative that the trademark in question had became distinctive through use in the reexamination proceeding; it was improper for the court to incorporate the new claim into the scope of judicial review under the circumstance that the Avon did not present the claim, hence, the TRAB did not determine whether it complied with the relevant provision. For this reason, Avon's appellant ground was not tenable. Therefore, the Court rendered, on 8 June 2005, Ruling No. Gaoxingzhongzi 163/2005 to have rejected the appeal and upheld the original judgment. (5141x)

French DP Won in the Lawsuit against TRAB in Second-instance Trial

The French DP Co., Ltd. (BP) filed, in March 2000, an application for registration of a trademark comprising a device of "D" in a flowery type (the present trademark) to be used on goods, such as purses, in class 18 of the International Classification. The Trademark Office refused the application on the ground that the present trademark was similar to another person's registered trademark (the reference trademark) used on similar goods. The DP applied for reexamination. Upon examination, the TRAB held that the distinctive "D" device of the present trademark and that of the reference trademark were substantially the same in compositional features and visual effect. The two trademarks were similar, and their being used on such identical and similar goods as purses was likely to create confusion on the part of the consumers, and they constituted similar trademarks used on identical or similar goods. Therefore, the TRAB decided to have rejected the application for the registration of the present trademark.

The DP instituted lawsuit in the Beijing No. 1 Intermediate People's Court, which rendered Ruling No. Yixingchuzi 747/2004 to have upheld the reexamination decision made by the TRAB. The DP lodged an appeal.

Upon hearing the case, the Beijing Higher People's Court believed that although both trademarks were composed of the letter "D" in the flowery type, they were different in composition and components of the device, and in pronunciation. Besides, DP's series of trademarks all contained the single letter "D" in the flowery type. The present trademark was recognizable and familiar to the Chinese consumers. For this reason, the ground was not tenable on which the TRAB determined that the present trademark and the reference trademark were similar trademarks, with insufficient legal basis. That decision made by the first-instance court to uphold the original judgment was contrary to the provisions of the Administrative Procedure Law. The Beijing Higher People's Court made, on 20 June 2005, Ruling No. Gaoxingzhongzi 182/2005 to have revoked the TRAB's reexamination decision on the rejection, and order the latter to make another decision on the registration of the present trademark. (5141x)

Case of Infringement of Book Trademark for Peter Rabbit Series Closed

In October 1994, the UK Frederick Warne & Co., Inc. (FW) registered, as a trademark, the outline of the "Running Peter Rabbit device" which was created by Beatrix Potter, an English fairy tale writer, and has entered the public domain since 1 January 1994. The trademark was approved to be used on goods of class 16 in the International Classification, such as books and magazines. In April 2003, the China Social Science Press (CSSP) compiled the Tale of Peter Rabbit and other fairy tales created by Potter into Peter Rabbit Series, and published them, with the miniature of "Running Peter Rabbit device" printed on the front cover, back cover, spine of the books, and at the corner of the odd pages of the Series. The FW lodged a complaint with the authority for industry and commerce against the CSSP for infringement of its exclusive right to use the registered trademark. The West District Branch Office under the Beijing Administration for Industry and Commerce (the Branch Office) determined that the CSSP had committed infringement, and decided to confiscate the infringing books in stock and impose a fine of over RMB 350,000 yuan. After the administrative review, the CSSP brought an action in the Beijing No. 1 Intermediate People's Court, which rendered Ruling No. Yiminxingzi 231/2004 to have upheld the decision on the penalty. The CSSP appealed to the Beijing Higher People's Court.

Upon hearing the case, the court of second instance held that the "Running Peter Rabbit" device was a work in the public copyright domain, and the WF's application for registration thereof as a trademark was not contrary to the law provision; the CSSP was also entitled to due use of the device. However, the CSSP used the device on the goods identical with those on which the registered trademark "running Peter Rabbit device" was approved to be used, which was liable to create mis-identification. The CSSP's had committed the infringement on the exclusive right to use the registered trademark. It was proper for the Branch Office to order it to immediately cease its infringing act, and decide to confiscate the infringing books in stock. Taking into account that the circumstance of the infringement was not so serious in the present case, imposition of the fine was obviously unfair. On 1 September 2005, the court of second instance made Ruling No. Gaoxingzhongzi 85/2005 to have reversed the first instance ruling, upheld the penalty decision made by the Branch Office to order the CSSP to cease the infringement immediately and confiscate the infringing books in stock, and to cancel the decision on the imposed fine. (5141x)

Case of "DANCING WITH THE WOLVES" Trademark Registration Dispute Closed

After the Trademark Office preliminarily examined and published the application filed in 1999 by the Hong Kong Yian Trading Corporation (Yian) for registration of the trademark of "DANCING WITH THE WOLVES (pronounced as "Yulanggongwu" in Chinese Pinyin) and device" on goods of cigarettes and cigar, in class 34, the Longyan Cigarettes Factory (Longyan) raised opposition to the application on the ground of its prior use of the phrases "Dancing with the wolves to show the true colours of the hero". The trademark Office decided that the opposition was tenable.

Yian applied for reexamination. Upon examination, the TRAB held that the advertising phases "Dancing with the wolves to show the true colours of the hero" used by Longyan on the goods of cigarettes was reputable to an extent and had the function to indicate the origin of goods; the trademark under opposition was difficult to be distinguished from the Longyan's trademark of "ÆßÆ¥ÀÇ SEPTWOLVES and the wolves device", which was contrary to Article 31 of the Trademark Law. Accordingly, the TRAB decided that the reasons for the reexamination were not tenable.

Yian brought an action in the Beijing No. 1 Intermediate People's Court, which made Ruling No. Yixingchuzi 425/2004, revoking the TRAB's decision. After that the TRAB appealed to the Beijing Higher People's Court.

Upon hearing the case, the court of second instance held that the Longyan's advertising phases "Dancing with the wolves" was not used on the package of the cigarettes of the "SEPTWOLVES" brand, so should not be deemed a trademark actually used on the goods; since its actually used wolves device was not registered or primarily examined, it fell outside the scope of protection under Article 28 of the Trademark Law. Therefore, the TRAB's determination that the wolves device in the trademark under opposition and that used on the package of the 'SEPTWOLVES' cigarettes made by Longyan were similar, so "it was difficult for consumers to distinguish it from Longyan's trademark of 'ÆßÆ¥ÀÇ SEPTWOLVES and the wolves device'" was contrary to the provisions of Articles 28 and 31 of the Trademark Law. Accordingly, the court finally decided, on 20 June 2005, to have rejected the appeal and upheld the ruling of first instance. (5141x)